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Pointing to the “impact of the macroeconomic environment,” News Corp revealed in an earnings report Thursday that its real estate venture Move Inc. — parent of portal Realtor.com — saw both its revenue and web traffic dip in the first three months of 2023.
The report, published after markets closed Thursday, specifically shows that Move brought in $141 million in revenue between January and March. That’s down 17 percent compared to the same period in 2022.
The report also shows that Realtor.com saw falling web traffic, with average monthly unique users dipping 24 percent year over year in the first quarter (Q1) to 72 million. Lead volume from the site also fell 30 percent year over year.
News Corp does not break out Move’s profits or losses. But the company did say that the broader economic environment is responsible for the dip in revenue.
“Real estate revenues, which represented 79 percent of total Move revenues, decreased $33 million, or 23 percent, driven by the continued impact of the macroeconomic environment on the housing market, including higher household interest rates, which has led to lower lead and transaction volumes,” the report reads.
Robert Thomson
In a call with investors Thursday afternoon, News Corp CEO Robert Thomson pointed to high-interest rates and “uncertainty” in the market, but also noted that “these are not permanent conditions.”
“When that uncertainty evaporates we’ll be primed to take full advantage of that opportunity,” he continued.
News Corp’s total Q1 revenue from digital real estate services was $363 million. That’s down 13 percent from $416 million in the first quarter of 2022. Digital real estate services was News Corp’s smallest segment, pulling in less revenue than news media, book publishing and various other endeavors.
Aside from Move, News Corp maintains digital real estate enterprises that operate in Australia and India.
Though housing professionals will be most interested in News Corp’s real estate-related earnings, the company is best known as the owner of The Wall Street Journal, Dow Jones and other media brands — all of which play an important role in the company’s earnings.
In total, News Corp brought in $2.45 billion in revenue during the first quarter of the year. That was down 2 percent compared to the same period in 2022.
The company made $59 million in profit between January and March of this year, down 43 percent from $104 million during the first quarter of 2022.
News Corp shares finished regular trading Thursday at $16.74. That was up for the day but down compared to the last week, month and year.
After News Corp published its earnings, shares spiked in after-hours trading.
Credit: Google
The company had a market cap of about $9.66 billion as of Thursday afternoon.
News Corp last reported earnings in February. At the time it revealed that revenue from Move fell 14 percent to $146 million in the final three months of 2022. The company attributed the dip primarily to “lower real estate revenues,” which make up the lion’s share of Move’s income.
In addition to lower revenue, News Corp revealed a cost-savings plan in February that involved cutting 1,250 jobs.
The February report also mentions the potential sale of Move to CoStar. News of a deal for Move surfaced in January and lit up the real estate industry. Acquiring Move’s Realtor.com would have put CoStar more directly into competition with Zillow, with which it has stoked a multi-year feud.
The two companies currently compete via portals in New York City, but a Realtor.com acquisition on CoStar’s part would have taken that contest national.
However, in late February CoStar announced that it wouldn’t acquire Move after all, instead choosing to focus on its existing brands. The announcement left News Corp to either build up the Realtor.com brand on its own or find another suitor.
Shortly after the deal fell apart, Thomson expressed a desire to reinvigorate Realtor.com.
“We remain open and opportunistic,” he said during a March conference. But “we have no intention of being the Miss Havisham of housing,” referring to the wealthy spinster from Charles Dickens’ Great Expectations who insists on wearing her wedding dress decades after having been jilted at the altar.
During his call with investors Thursday, Thomson said that he sees “signs of improvement” in the real estate market. And he noted that News Corp has an opportunity because, when it comes to housing, “digitalization is far from complete.”
